Easy Trend Factor (ETF)
Combines trend strength, directional consistency, and volatility patterns to evaluate trend quality with numerical scoring
Your 1:30 minute ETF strategy explanation video will be embedded here
How ETF is Calculated
Directional Consistency (30% weight)
Measures how often price moves in the same direction over the past 20 days. Higher consistency indicates a stronger trend.
NATS – Normalized Average True Strength (50% weight)
Calculates the ratio of average return to volatility over 30 days, then normalizes it using a tanh function for optimal scaling and stability.
Volatility Ratio Penalty (20% weight)
Rewards stable trends over choppy price movements by comparing short-term to long-term volatility patterns. A higher penalty means more stable trends.
Note: ETF is designed for educational analysis and learning. The backend and app use the same logic and score ranges. No autonomous trading or financial advice.
ETF Score Interpretation
≥ 0.40
Exceptional trend with optimal efficiency
Exceptional Performance: This score indicates a remarkably strong trend with high directional consistency, excellent risk-adjusted returns, and stable volatility characteristics. These are rare market conditions where trend following strategies typically perform best.
0.25 – 0.39
Strong trend with good consistency
Strong Trend Quality: Indicates well-established trends with solid directional momentum and favorable risk-return characteristics. These conditions often present good opportunities for trend-based strategies.
0.15 – 0.24
Good trend with decent efficiency
Decent Trend Quality: Shows moderate trend strength with reasonable consistency. While not exceptional, these conditions can still provide opportunities for patient trend followers with proper risk management.
0.05 – 0.14
Moderate trend quality
Mixed Signals: Indicates marginal trend conditions with limited consistency or efficiency. Trend following strategies may face challenges, and careful analysis of other factors is recommended.
-0.05 – 0.04
Weak or neutral trend
Neutral Territory: Little to no meaningful trend direction. Markets may be consolidating, ranging, or experiencing high volatility without clear directional bias. Trend strategies typically underperform in these conditions.
-0.20 – -0.06
Deteriorating trend quality
Deteriorating Trend: Indicates negative risk-adjusted performance, high volatility, or inconsistent directional movement. These conditions typically favor contrarian or range-bound strategies over trend following.
< -0.20
Poor trend with adverse characteristics
Adverse Conditions: Indicates very poor trend characteristics, negative risk-adjusted performance, or highly unstable price action. Trend following is not recommended in these conditions.
Why Choose Easy Trend Factor?
- Works across all market types (Stocks, Crypto, Forex, ETFs)
- Combines multiple trend quality factors for accuracy
- Clear numerical scoring system (range: -0.2 to +0.4)
- Accounts for both trend strength and efficiency
- Includes volatility penalty for stability assessment
- Backend and app use the same logic and score ranges
- Real-time calculation with current market data
Ready to Try Easy Trend Factor?
Experience this advanced trend analysis in our educational trading app
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Educational purposes only
All strategies are for learning and simulation. No financial advice provided. Market data refreshes on app reload. Past performance does not guarantee future results.
All strategies are for learning and simulation. No financial advice provided. Market data refreshes on app reload. Past performance does not guarantee future results.